USDCAD bullish trend challenged

Forex review for 20th January
January 20, 2016
USDCAD selling the rallies
January 22, 2016

Yesterday I pointed out that the USDCAD pair has managed to respect the kijun-sen (yellow line indicator) since 1.39 and has not broken below it since then. However today we have seen at least one 4 hour candle close below it and at the same time the upward sloping channel since 1.38 is being challenged. With many divergence signals and after such a huge rally, this might be the time for a trend reversal in USDCAD. At least a short-term reversal is long overdue and much-anticipated.

USDCAD

Longer-term trend remains bullish as price remains above the Ichimoku cloud. This correction could push the pair towards the lower channel boundary of the longer-term channel, near 1.42. So we could see a +200 pips decline from current levels.

USDCAD2

I believe we have confirmation of a short-term trend change and USDCAD bulls should be very cautious. This also implies that we should expect a bounce in Oil prices too. Will wait and see how this idea goes.

Have a nice day and thank you for taking the time to catch up on my thinking.

Alexandros Yfantis
Alexandros Yfantis
Fascinated by financial markets, studied International Securities Investment and Banking in the UK, works as a Portfolio Manager in Greece and runs a technical analysis website. Enjoys travelling and spending time with his family and preparing for the black belt in Korean Karate.